The seller is willing, but not at the price being offered.

And that may require the use of eminent domain to buy one of the last pieces of property needed for Hawk Ridge Estates, a planned mixed-income neighborhood near 52nd Avenue East and Skyline Parkway in Duluth.

"We've always said it was our hope not to use eminent domain, and we still hope that's the case," said Rick Ball, executive director of the Duluth Housing and Redevelopment Authority, the project's developer.

Still, last week, housing authority board members voted to "authorize the exercise of the power of eminent domain," if necessary, to acquire nearly one acre of still privately owned land within their 55-acre, 112-lot project.

Ball and others at the housing authority hold out hope negotiations with landowner Nick Ericson progress to the point where the power isn't needed, even if it's available.

Also, they've vowed to meet with Duluth city councilors and ask their blessing before using the power. Under law, the Housing and Redevelopment Authority doesn't need the council's permission. But a meeting between the groups could happen within two weeks, Ball said.

"I wouldn't expect the City Council to object," he said.

But if it does?

"Then that's some soul-searching we'll have to do down the road if it comes to that," he said.

ABOUT EMINENT DOMAIN

Eminent domain is a tool used by government to acquire private land if it is needed for a public good. A court determines the sale price for the land and also determines whether the proposed use of the land is in the best interest of the public as a whole. The process can take three months or longer.

Recent high-profile examples of eminent domain being used or considered in Duluth include the St. Mary's/Duluth Clinic Health System expansion, the Trinity Road expansion and the Village Place apartment project on Sixth Avenue East near Fourth Street.

Negotiations between Ericson and the Housing and Redevelopment Authority have been going on for about a year and a half.

"I don't know if you can even call it negotiations. That's what they'd call it, I guess," said Ericson, a Duluth native now living and working as a contractor in Mukilteo, Wash.

His father owned the property in Duluth first. In fact, he platted much of what is now slated to become Hawk Ridge Estates and made plans to develop it, Ericson said.

The elder Ericson backed away from the plans in the 1980s when Reserve Mining closed in Silver Bay and the housing market soured across Northeastern Minnesota. He stopped paying taxes on his Lakeside land. All but three lots were forfeited to the state.

Ericson continued paying taxes on three of his father's parcels because he wanted to build homes there. He planned to build and sell a house on the lot now being sought by the housing authority. Proceeds from the sale would be used to build a larger home for himself on the other two parcels, located up the hillside near Skyline Parkway. Those two parcels total about 2 1/2 acres.

Each of the three parcels carries an assessed value of $3,600, according to the city assessor.

TWO SIDES FAR APART

Ericson shelved his plans when a letter arrived from the Housing and Redevelopment Authority expressing interest in the land. He checked with a Realtor and was told lots in the area were selling for $55,000 to $60,000.

"I said, 'Make me an offer, something reasonable,' " Ericson said.

The housing authority had the property appraised twice and offered the appraised values of $14,000 and $16,000, Ericson said. (Ball declined to discuss any specifics about the negotiations.)

The housing authority bought the rest of the 55-acre property from eight private individuals at a per-acre cost of about $12,600.

The housing authority also offered $1,500 to help Ericson pay for his own appraisal. But Ericson said he wasn't able to find a reasonably priced appraiser who deals with eminent domain issues and who hasn't worked in the past with the Housing and Redevelopment Authority.

This week, Ericson hired a Realtor to help him determine his next asking price. A number is still being generated, the 1980 Duluth Central graduate said.

"I really don't know what it's worth for sure," Ericson said. "But they're supposed to be offering me fair-market value. They're not offering close to that and they don't seem willing to budge."

The housing authority's offers have been fair, Ball said, declining to discuss the negotiations any further.

COMMON GROUND

The Housing and Redevelopment Authority and Ericson appear to agree on one thing: A sale could include all three of Ericson's lots.

"I'd like HRA to buy them all and to pay the real value for them," Ericson said.

"We're always open to talking. There's still time to be flexible," Ball said. "If those other two properties become available, we'd be interested in possibly including them in the development, too."

If the two upper lots aren't included in Hawk Ridge, Ericson said he may develop them himself. He envisions eight or nine lots. Ironically, the Hawk Ridge Estates development would actually help him by bringing utility lines to the edge of his property.

The Housing and Redevelopment Authority also may need to use eminent domain to acquire road right-of-way easements for an extension of 52nd Avenue East into the project. However, most [not all] of the property owners appear willing to sell, Ball said.

http://www.duluthsuperior.com/mld/duluthsuperior/news/local/8842770.htm